Canadian banks raise rates as finance costs rise

Royal Bank of Canada raised mortgage rates for the second time in two weeks, setting the stage for another wave of hikes by major banks as they grapple with higher financing costs.

“This is just the beginning,” said CIBC Economist Benjamin Tal. “There is no reason to believe that this will stop at this point.” Indeed, by late Tuesday, Scotiabank had already followed suit, matching RBC’s 25 basis point hike on fixed-rate mortgages. Bankers at rival institutions were weighing their options

RBC kicked off the increases in March when it increased the price of fixed-rate five-year mortgages by 0.60 percentage points to 5.85%. Many rivals followed suit. Following Tuesday’s move, RBC and Scotiabank’s posted rates will be 6.10%.